Federal insurance for bonds

Subject to the limitations in section 1066c of this title, the Secretary is authorized to enter into insurance agreements to provide financial insurance to guarantee the full payment of principal and interest on qualified bonds upon the conditions set forth in subsections (b), (c) and (d). The Secretary may not enter into an insurance agreement described in subsection (a) unless the Secretary designates a qualified bonding authority in accordance with sections 1066d(1) and 1066e 11 See References in Text note below. of this title and the designated bonding authority agrees in such agreement to— provide in each loan agreement with respect to a loan that not less than 95 percent of the proceeds of the loan will be used— establish an escrow account— the balance of which— Any insurance agreement described in subsection (a) of this section shall provide as follows: Upon receipt by the Secretary or the Secretary’s designee of the certification described in paragraph (4) of this subsection, the designated bonding authority may draw a funding under the letter of credit in an amount equal to— Subject to subsection (c)(1) the full faith and credit of the United States is pledged to the payment of all funds which may be required to be paid under the provisions of this section. Notwithstanding any other provision of law, a qualified bond guaranteed under this part may be sold to any party that offers terms that the Secretary determines are in the best interest of the eligible institution.